Dollar higher as Egypt protest worries wane
- From: AAP
- February 01, 2011
THE dollar was higher this morning as concerns wane over the economic impact of anti-government protests in Egypt.
At 7.00am (AEDT), the local unit was trading at 99.73 US cents, up from 99.47 cents on yesterday.
Since 5.00pm (AEDT) yesterday, the dollar traded between 99.19 US cents and 99.90 cents.
Economic data released overnight showed that US consumer spending rose 0.7 per cent in December, its sixth straight monthly increase, and Eurozone inflation was at 2.4 per cent in January.
Westpac senior market strategist Imre Speizer said appetite for risk assets, such as the Australian dollar, improved overnight.
"Most importantly, the level of concern over Egypt has dissipated, not to say that's completely over but the extent of contagion and other things that were expected from that country probably may not eventuate," Mr Speizer said from Wellington.
"So the Egypt story is waning a little," he said.
"The second factor is the positive US data, which surprised (the market).
"The Eurozone's inflation number was higher than expected, raising concerns the ECB may talk rates higher."
The Reserve Bank's (RBA) board meets during the local session and is expected to keep the cash rate on hold at 4.75 per cent.
Mr Speizer said the focus wpuld be on the statement that accompanies the announcement for indications of the bank's thinking about future rate moves.
"Given the unanimous opinion in the marketplace saying they won't hike, it will be about the wording of the statement and how much emphasis they put on the floods and last week's low inflation print," he said.
Mr Speizer expected the Australian dollar stay in the 98.00 to 100.00 US cent range during trading today.
